Why PPFAS's dynamic asset allocation fund suits retirees

Summary: What makes PPFAS’s Dynamic Asset Allocation Fund tick and why does its CIO, Rajeev Thakkar, think it suits conservative investors best? In this insightful conversation, he shares thoughts on asset allocation, risk, taxes and how to think long-term even when the market doesn’t go your way. A seasoned value investor with over 25 years of experience in the markets, Rajeev Thakkar isn’t one to chase fads or believe in shortcuts. As Chief Investment Officer at PPFAS Mutual Fund, he draws deeply from the philosophies of Warren Buffett and Charlie Munger. In a market driven by FOMO (fear of missing out) and momentum, Thakkar urges investors to respect cycles, manage expectations and focus on long-term wealth creation—especially in volatile or directionless phases. In this conversation, he talks about the importance of asset allocation discipline, the positioning of the Parag Parikh Dynamic Asset Allocation Fund and why it’s tailored for conservative, cash flow-oriented investors. He also discusses market risks, tax-efficient strategies and the rational thinking that anchors PPFAS’s fund management approach. You talk about markets as cycles and not as straight lines. So in today’s world, where everyone’s chasing momentum or pouncing on every oversold chart, how do you help investors realise that the next cycle might look completely different from the last one? An interesting statistic comes up all the time regarding the number of demat accounts opened or the number of first-time mutual fund investors. Many of these investors think that allocating money to equity is a magic bullet. Just because you allocate more money to equity, doesn’t mean you’ll get 2x or 3x the returns that a bank FD (fixed deposit) or a bond gives you. Suppose bonds offer 5-6 per cent, people come with the expectation that if they have invested in equity, they should get 15 per cent. Equity doesn’t work this way. Equity allocation typically pays off in the long run. And when we talk about the long run, people think of the definition of “long-term” in the Income Tax Act, i.e., they assume that if you hold an investment for more than a year, it becomes a long-term investment. Whereas one year is not really long term when it comes to asset allocation. As of now (July 2025), the one-year performance of the Nifty 50 has been flattish. So people could say that Nifty has not even matched a bank FD. Some may think this is an aberration,